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September 20, 2018 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Supply Chain Technology Leaders vs Laggards bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Distribution Digest
bullet Cartoon Caption Contest Begins bullet Trivia      bullet Feedback
bullet New Expert Column and Supply Chain by Design bullet NEW On Demand Videocast



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first thought


Supply Chain Graphic of the Week
The Six Most Likely Scenarios for Autonomous Trucks


UPS Investing Big in Peak Season Capacity

Now Union Pacific to Try Precision Railroading
IKEA Going All Green on Local Deliveries
US Truckload Rates Still Heading Higher, Much Higher


September 5, 2018 Contest

See The Full Cartoon and Send in Your Entry Today!


This White Paper Examines Crucial Factors That Must be Accurate to Ensure Inventory Optimization Projects Deliver Outstanding Results


Feature Story: Now Australian Paper Reporting on Tough Labor Conditions at Amazon Fulfillment Centers


Weekly On-Target Newsletter:
September 19, 2018 Edition

New Cartoon, Amazon Scrutiny, HP Metals 3D Printer, Gartner on RFID 2004, More

Myopic and Hyperopic Supply Chain Planning

by Henry Canitz
Product Marketing & Business Development Director

Digital Data for Global Supply Chain Analytics

by Gary M. Barraco
Global Product Marketing
Amber Road



Consulting firm PRTM and the then AMR Research led the charge to create what organization in 1996?

Answer Found at the
Bottom of the Page

Supply Chain Technology Leaders vs Laggards

Just usually one week per year. SCDigest editor Dan Gilmore turns over the powerful First Thoughts podium to an guest contributor. This time, it is friend of SCDigest Rich Sherman, senior fellow at the Supply Chain Centre of Excellence at Tata Consultancy and long time supply chain analyst, who has taken this turn for SCDigest a few times before. Below starts his column, on the impact of digitization on companies and supply chain ecosyems.

Déjà vu All Over Again!

When Dan asked if I would like to write a guest column, I asked him what topic he would like me to write about. The response was, "I don't know; what have you been thinking about lately?" My immediate response was about looking at demand planning from the new forecasting lens opened up from the availability of new sources of causal data. The new data enables planners to leverage cognitive analytics and machine learning for pattern recognition to create new insights into why the statistical forecasts were wrong.


And, how that capability opened a new lens to more accurate predictive analytics based on what's happening now and in the future versus statistical analysis of historical data the produces hysterical results. The "leaders" are advancing their analytic maturity, improving planning accuracy, and adopting technology to facilitate better planning collaboration cross functionally inside the organization as well as within their supplier/customer ecosystem.


We all agreed that today's technology innovation isn't all that dissimilar to the innovation of the past. It's basically Déjà vu all over again.


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The laggards, on the other hand, bemoan and accept that the forecast is always wrong and continue to operate in silos inefficiently at great cost... the first of many common pitfalls in supply chain planning that are holding companies back from improved performance.

So I had thought to write about the pitfalls in supply chain planning and the transformation in organizational thinking, structure, and technology that is required to overcome the pitfalls and leverage the abundance of new data and advanced analytics to dramatically improve financial and operating performance.

As many of you who know me, the leader versus laggard behavior has always been fascinating to me. According to my friends at APQC, for the past 20+ years, leaders across industries have enjoyed more than a 2-1 cost advantage over their median competitors performance and frequently a 5-1 advantage over the laggards. It's been a conundrum to me.

As we know by Moore's Law, over the past several decades, technological innovation doubles and the cost is cut in half every two years. While the speed of technology innovation is that of the hare, the speed of technology adoption is more like the turtle. And, with the cost falling much faster than the perceived value, some will argue that the turtle is winning.

I beg to differ. The leaders are adopting the technology as fast it becomes available. Usually, through pilots and trials, the leaders start paving the path early to outpace the competition. The turtles eventually are forced to adopt or fall off the road and pay a greater price as the value is now well documented. So, why is it that leaders are leveraging the increased technology capabilities while the laggards keep crawling along?

In my experience, especially on the topic of advanced analytics and the new lens looking at planning, laggards look at new technologies through the lens of the "as is." They evaluate the "capabilities" of the emerging technologies and how they may improve performance in the short term. As analyst hype curves demonstrate, emerging technologies rarely provide immediate disruption or short term ROI and the laggards don't waste their time any further. Technology innovation is most frequently challenged to identify the monetization of the technological output.

Leaders, on the other hand, look at the technology innovation through the lens of the "to be." They evaluate the "opportunities" that the technology innovation offers. And, the cost is low as the technology company is trying to establish proofs of concept and market beach heads. As luck would have it, as I was thinking about the column, I had the "opportunity" to catch up with my early consulting mentor, Bob Sabath of Sabath Consulting, and my current colleague at TCS, Dom Champa. Dom had worked with Bob when they were at AT Kearney. We chatted about my hypotheses. We all agreed that today's technology innovation isn't all that dissimilar to the innovation of the past. It's basically Déjà vu all over again.

We laughed about going "digital". We've been going digital for the past 30 years. It's just that then we called it data processing. Cloud computing? We called it a service bureau. What we've learned over the years, focusing in on identifying the "as is" and defining the "to be" for clients, that to leverage technology innovation is to look at the possibilities. Back in the mid-90s, people looked at mobility as a wireless phone. We looked at it as an untethered personal network system node. Not only could we communicate by voice, the device was a computer, a data collection device, a location based service device (GPS), a multi-mode communication device, etc. Mobility would provide the platform to untether workers and be the basis for the democratization of commerce.

Did you ever think your wallet would be designed to shield the RFID chips on your credit cards from identity theft? Did you think that we could correlate weather patterns, event participation patterns, and social media topic trend patterns to create forecast insights? Did you think mobility, GPS, and the Internet of Things would be monitoring your location and behavior to enable personalized ads pushed to your devices? And, that companies can use these new insights to connect organizational and functional silos to improve financial and operating performance? How about drones delivering products and collecting inventory information? Are you prepared for commercial autonomous vehicles - they're coming around on the corner as they get off the Interstate?

My point is that technology innovation, like change, is inevitable; opportunity, competitive advantage and growth are optional. The leaders get it; and, they're not waiting for their competition to figure it out. They think in terms of their market ecosystem versus their supply "chain." We are in a connected age and innovation and change ripple through the ecosystem and infrastructure at the speed of data causing tidal waves of disruption.

However, the disruption often isn't noticed until the ecosystem is engulfed. For example, the "Amazon effect" took more than ten years to truly disrupt the retail ecosystem. How many companies have emerged from eCommerce opportunity and how many companies are failing by the inability to respond in time?

Compute power, data storage, and bandwidth are no longer the constraints to technology innovation and adoption that they once were... technology innovation will be simultaneously productive and disruptive as they now impact ecosystems and infrastructure, not just functions and organizations. With ecosystem change, business models change. Are you evaluating the opportunities that blockchain will offer to you? Or, will you become engulfed and drown before you can comply with the infrastructure changes to doing business in a blockchain?

The leaders are transforming their organization and technology infrastructures to compete in the new market ecosystems that emerging and converging technologies are creating. They looking at the opportunities, not just the capabilities, that emerging technologies have the potential to create and are developing strategies and conducting pilots to assess the disruptive impact that they may bring. It doesn't have to be hard. It just has to be done.

And, if you want to know more about looking at the common pitfalls to supply chain planning and the new lens to look at demand, give
me a shout.

What is your reaction to Sherman's column on leaders vs laggards? Let us know your thoughts at the Feedback button or section below.



NEW On Demand Videocast:

Digital Transformation's Value to the Supply Chain

The Future of Order Management

This videocast breaks down what digital transformation is and how automated order management solutions equate to supply chain benefits.

Featuring Dan Gilmore, Editor along with Esker's Dan Reeve.

Now Available On Demand

On Demand Videocast:

Digitizing the Order Management Process

Orders Still come in Many Different Forms and Systems - Here's How to Get them Under Digital Control

This videocast discusses breaks down all the ways in which orders can arrive, the downstream challenges associated with each, and the benefits of digitization.

Featuring Dan Gilmore, Editor along with Esker's Sarah Joiner.

Now Available On Demand

On Demand Videocast:

Reducing Costs through Automated Inventory Replenishment & Analytics

How Motor City Industrial Taps into Data Visualization to Help Customers Identify Waste, Reduce Inventory

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor along with Joseph Stephens, CEO, Motor City Industrial, Jay Fielder, Supply Chain Technology Manager, Motor City Industrial and Mike Wills, Chief Revenue Officer, Apex Supply Chain Technologies.

Now Available On Demand


We received several emails on last week's First Thoughts column on "Time for a Quadruple-A Supply Chain." A selection is below.

Feedback one A Quadruple-A Supply Chain?


Dan, A+ article!

Maybe another: A is Apple. Mihir Desai of HBS wrote about Apple's financial model as the future of capitalism in the NYT, which is here.

At the request of Business of Fashion, I applied Apple's lessons apply to fashion, found here.

I think these views link to your article in the intersection with electronics, where Hau Lee's work began; and, the influence of Warren H. Hausman, Hau's mentor, co-author and colleague at Stanford.


Both are pioneers on the supply chain as an engine of value, not just efficiency.

John S. Thorbeck




Another suitable A word might be Assurance - being sure that you can cope with interruptions in supply either of components or information.


Great articles - I read them each week with interest.

Frank Peplinski






I would add Variability control to the list of A's.


Blair Williams CSCP-F
Industry Professor NYU (retd)



Another fantastic article.


I agree that the fourth A should be "Analytics." This is something that is far different than was the situation when Hau Lee wrote his article in 2004, and is transforming supply chains.


"Competing on analytics" is an increasing reality, with a profound impact on supply chain planning and execution.


Agility, Adaptability, Alignment and Analytics - that sounds just right for 2018.


Todd Barnes





Q: Consulting firm PRTM and the then AMR Research led the charge to create what organization in 1996?

A: The Supply Chain Council, which created the SCOR Model, and was acquired by APICS in 2014.

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